Treasury yields moved higher in trading Friday as investors absorbed a stronger-than-expected August jobs report and recalibrated their outlook for Federal Reserve policy.
The 2-year Treasury note yield, which closely tracks expectations for short-term Fed rate moves, climbed more than 4 basis points to 4.379% — its highest level since January 2025. The 10-year Treasury note yield, the benchmark for mortgages, auto loans, and credit card rates, rose more than 1 basis point to 4.78%. The 30-year Treasury bond yield was little changed at 5.243%.
One basis point equals 0.01%, and yields move inversely to bond prices.
Jobs report beats expectations
The U.S. economy added 162,000 jobs in August, according to the Labor Department, well above the 53,000 consensus estimate from economists polled by Dow Jones. The report was released Friday morning as investors and policymakers weigh whether the Fed will raise rates at its Sept. 15-16 meeting.
A resilient labor market, combined with inflation that remains above the Fed’s 2% target on an annual basis, could give the central bank more room to hike. Market-based probabilities shifted accordingly: traders now price in a 58% chance of a quarter-point rate increase at next month’s meeting, up about 9 percentage points from a day earlier, according to the CME Group’s FedWatch tool.
“Fed officials have characterized the employment markets as stable but today’s stellar jobs report shows hiring is surprisingly robust given the high level of energy prices and the ongoing affordability crisis,” said Chris Rupkey, chief economist at FWDBONDS. “The only fear is the Fed itself if it thinks economic demand is hot enough to need a rate hike in a couple of weeks.”
Focus shifts to inflation data
Investors now turn their attention to fresh inflation data scheduled for release next week, which will serve as one of the final signals before the Fed’s decision. The report arrives amid heightened political attention on housing costs — Vice President JD Vance on Thursday called on the Fed to cut rates to improve home affordability.
Thursday’s session had seen bond yields ease, with the 10-year note sliding more than 2 basis points and the 30-year bond dropping more than 1 basis point, but Friday’s jobs data reversed that trend for shorter maturities.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/04/treasurys-bonds-nonfarm-payrolls-unemployment-data.html
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